News & Events

NRF 2019

Pay everywhere: mPOS goes mainstream

Mobile point of sale is on the rise and some significant advances in the last 12 months mean we’re getting closer to smartphones, tablets and dedicated wireless devices becoming as mainstream as cash registers and traditional point of sale terminals. However, mPOS has the advantage of not being tied to a specific location in the retail environment, in fact mPOS works anywhere, in principle.

mPOS has risen in value over the last few years. The swipe of a card has been more important than the ring of a cash register for a while but 2014 was the first year when the touch of a phone became something worth mentioning.

Real money in play

Apple Pay brought mobile payments to the attention of mass media around the world in 2014, Amazon recently entered the fray and mPOS itself is now an industry worth $507 billion (£320 billion).

Cash only? Not anymore…

For small merchants, mPOS gives the ability to take cards in all sort of locations from market stalls to open air events, pop up shops, cafés and kiosks where once ‘cash only’ was the rule. Mobile means terminals no longer need to be wired and can function with or without Wi-Fi networks, giving small merchants the ability to take payment literally anywhere.

Analytics at the finger tips

Not only is processing card payments a possibility but small merchants can also tap into sophisticated reporting tools to gain instant financial information, customer analytics, stock data or provide customer loyalty programs and rewards. With an integrated tablet based mPOS solution costing as little as $500, small retailers can compete with their larger counterparts, manage front and back end activities and increase customer loyalty.

Apps for payment

As mPOS comes of age, there are a range of apps available for download from app stores allowing merchants to take payment direct from a smartphone or tablet with the addition of a card reader which plugs directly into the device. This gives an easy way for merchants to take card payments using a ‘pay as you go’ model. Merchants can access a whole ‘apps ecosystem’ to improve their business and with set up possible via the app store, merchants can get going quicker than ever before.

Going global

mPOS doesn’t just make card payments available to a diverse range of merchants, it also opens up card payments to countries that previously had no infrastructure to deal with card payments. Many countries in Asia, Africa and the Middle East lacked point-of-sale infrastructure in the past and therefore card payment acceptance was less prevalent. With smartphones ubiquitous around the globe, mPOS is a way to leap frog into the age of digital payments for many countries.

Vertical shift

mPOS has often enabled certain industries more than others as platforms have been customised to suit specific industries like restaurants, cafés, deliveries and services. These verticals have attracted strong offerings and competition where other areas are still waiting for providers to offer services specific to their area.

Security

Over the last 12 months, security has ratcheted up in the mPOS space with layers of security at the level of hardware, apps, data and customer improved and tightened up. This includes mPOS devices being enabled for EMV and compliance with PCI’s Data Security Standards.

Line busting & ROI

During peak times, like holiday season, customers can abandon their shopping when lines are too long. mPOS allows merchants to send staff out to take payment on the floor and reduce the number of abandoned shopping carts. The same applies in QSR’s when lines are long. This also allows merchants to quantify the cost of their mPOS solution and put a genuine ROI value against the investment.

Tablets

mPOS has moved from being all about phones and dongles to tablets as new players enter the market with tablet solutions which can replace legacy POS systems. At the same time tablet based systems have become sophisticated enough to move from micro merchants to small and medium sized businesses, with apps providing the functionality which used to require expensive till systems and back office software on a sophisticated IT system. Now the same functionality can be had on smaller, sleeker and cheaper tablet based systems with few downsides plus they’re fully integrated ‘out of the box’ with payment processing included whether via a separate payment terminal or as part of the same system.

Driving innovation

mPOS is being driven by imagination, creativity and ingenuity. Fintech companies, rather than traditional banking industry, are invading the mPOS space. These start-ups are light footed, able to bring new product ideas to market and respond to customer demands quickly, with no legacy systems to hold them back. Plus they’re viewed positively by businesses, unlike traditional banks, still tarred by the financial crisis in many business owners’ eyes. Reinvention and re-imagination of the commerce experience is driving innovation, changing the payments landscape forever.

Downsides

Using a third-party app is instantly attractive. It can be downloaded in a matter of minutes and is easy to set up because it doesn’t require a merchant to develop, build and implement it. But any payment solution needs to be integrated with a company’s existing POS system to be genuinely useful. The payment app must be PCI compliant or it could put the retailer at risk. Sometimes app’s can have a mismatched loyalty program or branding which can’t be changed to match the retailers. All of these factors must be balanced against the advantages of being able to get set up quickly and easily to take card payments.

Criminal activity

Tablets are an attractive target for criminals. Unlike traditional POS hardware which can only be resold to businesses, tablets are a consumer product and have much broader resale value. If not properly secured in place, tablets offer a ‘smash and grab’ opportunity not seen before in the retail environment. Physical security is therefore more important than ever.

Times for change

mPOS has already fundamentally changed the payment industry and is doing so at an exponential rate. It’s been particularly advantageous for the micro, small and medium businesses who have struggled with accepting card payments in the past. Whether SMEs turn to banks or fintechs firms, the important thing for the mPOS industry is there seems to be no slowdown in adoption and room for growth. With an estimated £7.5 billion lost by SMEs not accepting cards in the UK alone, the untapped potential in the market is hugely tantalising to investors and financial service firms.

What next?

mPOS is helping all sorts of businesses take face to face card payments in a democratisation of the payments market which is unprecedented. Plus it’s arming business owners with business tools which can analyse data and generate management information on the fly whatever the size of the retail operation. Consumers expect to be able to pay by card and it’s increasingly becoming a necessity for businesses to accept card payment. At the same time all business owners need to be aware of the obligations that taking digital payments place on them, not least complying with PCI DSS and ensuring customers’ financial data is safe. Plus they must be aware of the target their new payment technology represents for criminals.

Maintaining physical security goes a long way towards preventing an attack and often stands, locks and tethers can deter criminals and ensure that businesses can operate without interference.

Talk to Tailwind today to find out about how we can help safeguard your technology and keep you safe in the mPOS age.